Soros reports 7.9 percent stake in Penney, shares rise
NEW YORK (Reuters) - Billionaire investor George Soros reported a 7.9 percent passive stake in J.C. Penney Co (JCP.N) on Thursday, sending shares of the struggling department store chain up more than 7 percent.
Soros joins another billionaire, Bill Ackman, as one of the five largest stakeholders of the century-old retailer.
Penney has been exploring various capital-raising options with its financial advisers after a steep sales slump followed former CEO Ron Johnson's botched attempt at a turnaround.
Earlier this month, Penney borrowed $850 million from its $1.85 billion revolving credit facility to help buy inventory and revamp its business strategy. It also hired Blackstone Group LP's (BX.N) financial advisory arm to explore how best to position the firm financially. <ID:L3N0CZ0N8>
Johnson's dramatic changes, which eliminated coupons and sales, alienated core customers without bringing in new ones and led to a 25 percent decline in sales last year. In early April, Johnson was replaced with his predecessor Myron Ullman, who is bringing back the old discount pricing strategy.
In a regulatory filing on Thursday, Soros said he owned about 17.4 million shares of Penney. Ackman, who owns 17.8 percent of Penney's stock through his hedge fund Pershing Square Capital Management, was not immediately available for comment.
Penney declined to comment, while a representative for Soros could not be immediately reached. The retailer's shares were up 7 percent to $16.31 in after-hours trading from their $15.24 close in the regular session.
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